From Ukraine war to inflation, global headwinds take a toll on FDI inflows

According to the official, as far as 2022 is concerned, there has been a 4 per cent increase in FDI inflows

Shreya Nandi New Delhi

Computer software and hardware manufacturing was the highest recipient of FDI at $8.07 billion

Multiple challenges triggered by the Russia-Ukraine conflict such as high inflation, expansionary monetary policy and recessionary trends in key developed economies are some factors that resulted in a drop in foreign direct investment (FDI) inflows into the country, a senior government official said on Friday.
“There are a lot of reasons globally that lead to a minor decline in FDI inflows. During Covid, we saw a lot of (FDI) inflows in the software sector and the bubble has got reorganised. The US has increased the interest rate from 0.25 per cent to 4.75 per cent in one year. Interest rates have also increased in the UK, Netherlands, and Singapore over last year. Venture capital funding has also squeezed off,” the official said.
The statement comes in the backdrop of a 15 per cent contraction in foreign direct equity investments during the first three quarters of the current fiscal to $36.75 billion. Total FDI, which includes equi

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First Published: Feb 24 2023 | 11:18 PM IST

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